Contractors–What You Need To Know Now to Cope with the COVID-19 (coronavirus) Pandemic

By Mark A. Cobb

Thank you to all of our clients and colleagues who are sharing the burden of COVID-19 pandemic. Everyone is struggling a bit more than usual, but, together, we will make this through. We have a lot to cover in this important blog article so I’m just going to dive in and start without the preliminary overtures.  The following is a list (in no particular order) of items which construction professionals must consider in order to help themselves cope with the COVID-19 / coronavirus pandemic::

Update on Our Offices: Even with two physical offices in Georgia, our attorneys and staff have had the ability to work remotely (and seamlessly) since 2007. I’m happy to report that our construction attorneys, paralegals, and secretaries are all able to continue to work, and our telephone lines and emails are fully functioning.  So, please feel free to reach out to us.

Important Updates: Since the threat of Covid-19, we have been listing important updated on our Cobb Law Group Facebook page. We will continue to list important resources such as OSHA recommended work-place guidelines and executive orders from our Governor, Georgia’s State and Federal Courts, and President.  Please “like” us on Facebook to get the most current information.

Georgia Courts: As reported previously, the Georgia Courts are in limbo currently as they limit the types of cases moving forward. Most importantly, the Georgia Supreme Court’s recent Order “….suspends, tolls, extends, and otherwise grants relief from any deadlines or other time schedules or filing requirements imposed by otherwise applicable statutes, rules, regulations, or court orders, whether in civil or criminal cases or administrative matters….” PLEASE NOTE THIS DOES NOT SUSPEND CONTRACTUAL OBLIGATIONS!

Permitting & Inspection Issues: On a positive note, Georgia Governor Kemp issued an Executive Order dealing with multiple, emergency issues. One of the issues addressed allows private engineers and architects to perform plan review and inspection services when local government cannot (or will not!) provide timely plan review and inspection services.  Click here to read the Order > >

Potential Delay Notices: We believe that is is imperative that all contractors give notice, as soon as possible, to those in higher tiers or a potential delay. This may sound premature, but it may help contractors and subcontractors in their future claims related to delay and damages.

Send Affirmation Letters:  Similarly, it is important that you send letter to those on higher-tiers confirming such items as the work is progressing, the owner’s (or general contractor) intentions regarding suspension or termination, that payment will not be withheld and that lending remains in-place, and that work-place safety is a priority; for those on lower-tier, you should send letter to each party asking them to confirm that performance, availability of materials and equipment, and costs of labor and materials,  among other things, will not change.

Force Majeure Certificates: If you are relying on Chinese goods for your projects, then the China Council for The Promotion of International Trade (CCPIT), officially accredited with Beijing’s Commerce Ministry, is providing Force Majeure Certificates for those who ualify.  This certificatoin may assist you later in delays or cost increases after the work returns to normal.

Notices, Notices, Notices: In addition to the foregoing notices, you must confirm with all of the notice requirements of your contracts (see below); for example, it is vital that you send proper notices for all anticipated delays, force majeure issues, change order for increased costs or time for a contract extension.

If You are Currently Negotiating Contracts: Henceforth, when contractors and subcontractors are negotiating new contracts, please consider including provisions specifically addressing delays and cost impacts resulting directly or indirectly from COVID 19 / coronavirus; specifically, contracts should address the following:

  • Disruptions to the supply or cost of materials and/or equipment;
  • Illness of workforce (or caring for those who are sill) and/or generally unavailability of labor;
  • Government quarantines, shelter-in-place orders, closures, or other mandates, restrictions, and/or directives; consider adding non-legal (but authoritative) recommendations such as recommendations from the Centers for Disease Control, for example
  • Owner or Contractor restrictions and/or directives; and/or
  • Measures and mechanics for your contractual or legal health and safety obligations associated with COVID 19.

Existing Contracts: First and foremost, it is vital that you review each contract to which you are a party. Specifically, you may want to focus on the following provisions to determine your rights and your notice requirements:

  • Force Majeure clause
  • Delay provisions (if any other than the force majeure clause)
  • Changes Order and How to Claim additional Costs and Time clauses
  • Suspension of Work clause
  • Termination clauses
  • Material Escalation clauses (if you are fortunate enough to have one)
  • Specific inclusions, exclusions, and qualifications in the scope of work

Document: In the event that you need to give formal notice on your project due to delays, interruption, force majeure, cost escalation, etc, then it is equally important that you document your reasons for the notice.  Consider such activities as your written notices (and receipts for sending them timely), labor reports, notices from your vendors and suppliers.

Insurance:  If you have business interruption insurance, you may want to contact your agent to determine whether the insurance you have covers you during epidemics and pandemics; and, very importantly, make sure that all notice requirements (to make a claim under you business interruption insurance) are met.

Don’t Stress:  This sounds impossible to do at this time, as we all worry about work, work-flow, cash-flow, payments, and keeping ourselves, families and employees safe just to name a few of the concerns.  Despite this, we are all in this together, and every business–from owner to labor company, from construction company to retail establishment–is experiencing the same concerns.  Now, it the time to be the leader who calming leans into the problems but recognizes that not all problems have a workable solution.  Enjoy time with your families and focus on the positive news and events which continue to happen every day.

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